Nigeria should do more to increase domestic revenue - IMF Africa chief

In the African countries worst hit by the commodity slump, the balance between investment aimed at development and sustainability had to be improved, said Abebe Aemro Selassie, the International Monetary Fund (IMF)'s director for Africa.

The commodity price slump of 2015 ended a decade of rapid growth across Africa. Economic recovery in sub-Saharan Africa is set to continue with growth projected to pick up from 3 per cent in 2018 to 3.5 per cent in 2019. But economic performance remains bifurcated.

According to IMF's report, published in early April, some 21 countries, mainly the region's more diversified economies, are expected to sustain growth at 5 per cent or more and remain on the impressive per capita convergence path they have been on since the early 2000s. But in the 24 other more resource-dependent economies, including the largest (Nigeria and South Africa), the growth looks set to remain anaemic in the near term.

Addressing these challenges requires building fiscal space and enhancing resilience to shocks by stepping up actions to mobilize revenues, alongside policies to boost productivity and private investment, the report said.

"What is needed for those countries now is to re-calibrate that balance. In particular, if they can mobilise more revenues, they can address one of the pinching concerns which is debt-service ratio," Selassie said during an interview on Tuesday in Nigeria's capital, Abuja. He cited Chad and Congo Republic as countries with debt-sustainability issues.

Nigeria, which has Africa's biggest economy, should do more to increase domestic revenue by raising taxes to improve debt service and fund infrastructure development. Concerns about rising debt in Zambia, alongside accusations of additional hidden borrowing and government corruption, have spooked investors and Western donors in recent months. The IMF felt the balance between investment and sustainability also needed "re-calibration" in the copper producer, which was hit hard by the slump in commodity prices, Selassie said.